Global handset leader Nokia (NYSE: NOK) said today it was scaling back production and closing one of its research and development plants in an attempt to rein in annual costs as global demand for handsets continued to cool.

SEE ALSO: Earnings: Nokia Keeps Looking To Internet As Profit Crashes

On the chopping block is Nokia’s research and development site in Jyväskylä, Finland, which will be phased out by the end of the year; 320 employees will lose their jobs. Production at its Salo-based plant, responsible for turning out Nokia’s high-end handsets, has also been cut back. All 2,500 people there will be laid off on a staggered, temporary basis, with between 20 percent and 30 percent of staff idle at a time. Nokia is also aiming to layoff an additional 60 employees in its global support functions and another 30 workers in the New Businesses line in its Services unit, though these cuts have not yet taken place.

The closures and job cuts are part of Nokia’s previously stated aim to reduce annual spending by some 700 million euros ($905 million). According to Reuters, analysts expect handset market volumes to drop18 percent in the January-March quarter, with Nokia expected to report its weakest quarterly earnings in more than seven years. A Reuters poll of analysts predicted that Nokia’s phone unit would see turnover fall 31 percent, and are forecasting a 65 percent plunge in operating profit compared to the same time a year ago.